Hello, View fans. Back at work after a week off, which means it’s time for your morning links. Here’s a look at some of what I’ve been reading.
Another day, another trading scandal
This time it’s in China. Everbright Securities, a Chinese state-controlled brokerage, was banned from proprietary trading for three months after erroneous trades sparked the wildest swings in the country’s stocks in four years, according to Bloomberg News. Before you know it, China’s securities firms will be on a par with Wall Street when it comes to flash crashes, fat finger foul-ups, prop-trading disasters and the like.
How long can the bull market in equities last?
Jack Hough of Barron’s says stocks are more richly valued than a lot of investors realize. “Opportunities for easy earnings gains through cost-cutting have shrunk,” he writes. “There's evidence that more companies are falling back on a bad habit: using accounting adjustments to earnings to beat estimates.” Or as an old saying goes, there are no new accounting tricks, only new investors.
Just how many federal investigations are there at JPMorgan?
There are six from the U.S. Justice Department alone. From Dan Fitzpatrick of the Wall Street Journal: “The numbers put J.P. Morgan on pace to supplant Bank of America Corp. as the big lender with the most legal problems.”
No end to the drama surrounding Herbalife
What was it about William Ackman’s bearish presentation on Herbalife last year that got some rival hedge-fund managers so upset at him? The timing, write Jennifer Ablan and Matthew Goldstein of Reuters. Less than a week before Christmas, his call sent the company’s stock tumbling -- which boosted his firm’s year-end returns. His short position on Herbalife has been a big loser this year.
More government intimidation of journalists
From Glenn Greenwald, chronicler of Edward Snowden’s leaks, writing in the U.K.’s Guardian newspaper about the detention of his partner by British authorities: “To start detaining the family members and loved ones of journalists is simply despotic. Even the Mafia had ethical rules against targeting the family members of people they felt threatened by. But the U.K. puppets and their owners in the U.S. national security state obviously are unconstrained by even those minimal scruples.”
(Jonathan Weil is a Bloomberg View columnist. Follow him on Twitter.)